The European Space Agency is actively involved in specifying and developing microelectronic products targeted for the space segment. The products range from standardised components for on-board avionics applications to dedicated circuit developments for high end payloads and instrumentation. With new demanding missions being planned and with a general restructuring of the European space companies, the Agency is changing its way of developing and promoting microelectronics. The presentation will describe how the Agency used to procure microelectronics and how it has adapted its development strategy over the year to meet the ever changing space market demands. The present situation will be analysed and current methods and programmes will be described, concentrating on the introduction of intellectual property cores and system-on-a-chip solutions. An outlook for the space microelectronics market in the next coming years will be provided. The presentation will concentrate on space avionics systems and specific payload applications such as imaging and particle detection front end electronics.